The Governor of the Bank of England Sir Mervyn King is warning that governments have still not addressed the fundamental issue of overspending which lies at the root of the financial crisis. Nations have been living beyond their means on borrowed money for too long.

In a speech in Liverpool last night the governor said action by eurozone leaders this weekend would only ‘buy time’ but added, ‘So far, that time has not been used to deal with the underlying imbalances, or the weaknesses in bank and sovereign balance sheets. Time is running out.’ Another stop-gap?

There is mounting expectation in financial markets that a meeting of EU leaders this weekend will reach agreement on a bailout deal for the banking sector and final solution for Greece. But sovereign debts continue to rise with the West borrowing from the East to finance a lifestyle now beyond its means.

‘Without a rebalancing of spending in the world economy, a struggle between debtor and creditor countries will inflict economic pain on everyone,’ Sir Meryvn noted. ‘We must use the gravity of the global crisis to provoke a bold response.’.......read on

Spain’s credit rating was cut for the third time in 13 months by Moody’s Investors Service as Europe’s debt crisis threatens to engulf the nation.

Moody’s yesterday reduced its ranking to its fifth-highest investment grade, cutting it by two levels to A1 from Aa2, with the outlook remaining negative. Standard & Poor’s downgraded Spain on Oct. 14 to its fourth-highest investment grade, and Fitch Ratings cut it to the same level on Oct. 7, the day it also downgraded Italy.

“Moody’s is maintaining a negative outlook on Spain’s rating to reflect the downside risks from a potential further escalation of the euro-area crisis,” it said in a statement. The company cited the “continued vulnerability of Spain to market stress” that is driving up the cost of borrowing, as well as weaker growth prospects. Spanish bonds were little changed.

Spanish and Italian bonds are being pummeled as euro leaders fail to convince investors they can contain the debt crisis and shore up banks to withstand the risk of a Greek default. German Chancellor Angela Merkel said yesterday that a European Union summit Oct. 23 will mark an “important step,” though not the final one in solving the sovereign debt crisis.....read on

Washington is to
send a hundred special operations troops to Uganda to help local forces
fight the Lord's Resistance Army, widely considered a terrorist
organization. The Ugandan government has been fighting this guerilla
group for over two decades. But Asia Times correspondent Pepe Escobar
says America has far-reaching plans for the region, that have little to
do with protecting civilians.

The last time the consumer prices index (CPI) was higher was March 1992, when it reached 7.2pc, according to the Office for National Statistics (ONS) data.

Annual inflation was also 5.2pc in September 2008, when oil rocketed to an all-time high of $147 a barrel and the global financial system was on the brink of collapse following the failure of Lehman Brothers.

The ONS said that the price rises of four of the six large utility companies have been factored into the inflation figure so far. The other two will be reflected in the October inflation figures.

Bills for gas, electricity and other fuels rose 18.3pc on the year in September, while transport costs were up 12.8pc. Food prices were 6pc higher than last year. Economists had expected CPI to be between 4.9pc.

The unsavoury combination of high inflation and high unemployment in September pushed the UK 'Misery Index' to a 19-year according to Chris Williamson, chief economist at Markit....read on

This week Max Keiser and co-host, Stacy
Herbert, talk about JP Morgan's bet against itself, a Florida
legislator's plans to boost the economy with 'dwarf-tossing' and Tim
Geithner flying economy. In the second half of the show, Max Keiser
interviews Saifedean Ammous about Mubarak's odious debts and about
whether or not Occupy Wall Street is an Arab Spring for the West.

US Inflation Rate

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